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I have been asked to answer this question, however I am not sure what the problems are and what concepts should be acknowledged. Could any help?

A national law from 1994 of Member State X had appointed the Claimant as the sole provider of public service obligations and as the sole designated undertaking authorized to import electricity into the territory of X through the sole existing interconnection. In order to allow the Claimant to accomplish its PSOs, an electricity import capacity of 700 MW out of the 1500 MW available on thecross-border line was reserved on a preferential basis to it until 2013 for the transmission of electricity issued from take-or-pay electricity contracts signed by the Claimant in 1994 with two electricity undertakings situated in other Member States. In 2011, following a request of access to the grid by a new entrant to the market, the national TSO has decided to denounce the preferential reservation of capacity in favour of the Claimant arguing that these constitute obstacles to the proper functioning of the internal energy market and bring important detriments to competition. Nevertheless, at the same time, the national TSO decided to continue granting preferential capacity rights on the same interconnection to a third-country supplier until their expiry in 2015. The third-country supplier had signed in 1998 a contract with the national TSO, committing to bring a significant financial contribution to the construction of the transmission line on which it enjoys that right. In its decision, the TSO also made reference to the existence of a bilateral investment treaty between X and the third-country, which granted protection to the investment made by the said thrid-country supplier in the development of the transmission line on country X.
In view of the above, the Claimant maintains that the TSO decision has placed it in an unfavourable position in comparison to its competitors and that its creates confusion as to the legitimate expectation of parties in relation to contractual rights and obligations stemming from contracts signed before the liberalization of the EU energy markets.

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